New India Ordered To Pay Mediclaim Of Rs.4,12,177: Deficiency in Service

Deciding on a case filed by Consumer Education and Research Society (CERS), Ahmedabad, and Rajendrabhai D. Bhagat, Ahmedabad, the Consumer Disputes Redressal Forum (CDRF), Ahmedabad City (Additional), held New India Insurance Company and its Third Party Administrator (TPA), M/s. Health India – Bhaichand Amoluk Insurance Services Limited, Ahmedabad, guilty of deficiency in service.

The Forum allowed the complaint and ordered the insurer to pay Bhagat Rs. 4,12,177, besides Rs. 1,250 towards cost. The Forum also ordered New India to pay interest at the rate of 6 per cent from 28 September 2007, the date when it informed Bhagat of the repudiation, till payment.

Bhagat had taken a yearly cashless Mediclaim policy of Rs. 5,00,000 with New India Insurance Company valid till 10 December 2007. In February 2007, he was admitted to the Sterling Hospital in Ahmedabad. However, within a week, he got voluntarily discharged and admitted to Krishna Hospital for treatment on 19 February. From there, he applied to New India for a cashless facility. New India refused to offer this facility. After his treatment at Krishna at a cost of Rs. 4,12,177, Bhagat, on 19 March, claimed reimbursement from the insurer. New India neither repudiated nor accepted the claim. Bhagat and CERS filed a case against New India, alleging deficiency in service.

New India submitted that according to the discharge summary from Sterling, Bhagat had hypertension (HPT) for the past 10 years. The medical papers produced by Bhagat also showed, according to the insurer, a history of cardiac problem in 2000, 2003 and 2006. According to this discharge summary, he had been advised ‘thallium scan on heart’. This treatment had been done at the Krishna Hospital. Thus, it had repudiated the reimbursement claim on the basis of ‘per-existing disease’ and ‘non disclosure of disease’. The insurers also submitted that it had informed Bhagat of the repudiation by its letter of 28 September.

The Forum passed a verdict in favour of Bhagat. It held that though the insurers were using the documented proofs, including the discharge summary as a trump card, the same documents that mentioned 10 years’ HPT as past history mentions that the current treatment “was not related to the disease history”. The Forum also noted that there was no record from the doctor or the hospital of the angiography performed on Bhagat, other than the hospital summary to prove the history of disease. The burden lies on the insurer to prove a pre-existing disease, the Forum observed.

The Forum comprised Mr. V.C. Modi, president, and Mrs. J.Y. Shukla, member.